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Wednesday, 28 March 2001
Page: 25869

Dr WASHER (2:44 PM) —My question is addressed to the Minister for Health and Aged Care. Would the minister update the House on how the federal government has acted to ensure that private health insurance remains affordable for all Australians.

Dr WOOLDRIDGE (Minister for Health and Aged Care) —I thank the member for Moore for his question and his interest. Last sitting week I was able to inform honourable members that out of 43 of the 44 health funds in Australia we had had 41 funds that were not going to increase their premiums this year. One tiny fund was having a small increase; one larger fund was having a decrease. This is a result that is unprecedented and certainly has not happened in the time since we have kept records on private health insurance.

Yesterday evening I made a determination on the 44th fund, HBF in Western Australia, a large fund of 594,000 members and unique amongst the health insurance funds in Australia because they had chosen to put in for a premium increase. Their profits this year are substantial—$28 million in the first seven months of the year—and our projections on industry-wide assumptions are that even without a premium increase they would make a profit next financial year. On this basis it was impossible for me on public interest grounds to allow this premium increase, so I have in fact disallowed it. HBF will have to decide whether they choose to accept this course or take the government to the Federal Court.

It is a pity that HBF chose to be unique amongst all the health insurance funds in Australia but I simply was not prepared to allow families on top cover, with ancillaries to pay, to have to pay another $1.60 a week in a premium increase at a time when funds are making record profits. A premium increase by HBF could be a signal for other funds in Australia to have a round of premium increases. Indeed, we had been informed by one large fund that they would have to reconsider their opinion should that happen, and that would take us right back to where we were under the Labor Party. In accordance with the law I am happy to table my declaration and a statement of reasons for doing so.